Custom's recordal is an effective measure to stop infiltration of illegal and counterfeit products in the territory of India.
The Central Board of Excise and Customs, Department of Revenue, Ministry of Finance vide its Notification No. 47/2007 dated 8.5.2007 passed the Intellectual property Rights (Imported Goods Enforcement rules, 2007, whereby the right holder of an Intellectual property Right has an option to register his rights with the Customs department and after grant of said registration the import of allegedly infringing goods in to India Shall be deemed as prohibited. The said registration with customs department is often referred to as Custom's Recordal.
The infringing goods as per the notification are defined as goods which are made, reproduced, put into circulation or otherwise used in breach of the intellectual property laws in India or outside India and without the consent of the right holder or a person duly authorized to do so by the right holder.
As per Rules, " Intellectual property law" means the Copyright Act, 1957, the Trade Marks Act,1999, the Patents Act, 1970, the Designs Act, 2000 or the Geographical Indications of Goods (Registration and Protection) Act, 1999 and "intellectual property" means a copyright as defined in the Copyright Act, 1957, trade mark as defined in the Trade Marks Act,1999, patent as defined in the Patents Act, 1970, design as defined in the Designs Act, 2000 and geographical indications as defined in the Geographical Indications of Goods (Registration and Protection) Act, 1999;
The Rules also define " right holder", which means a natural person or a legal entity, which according to the laws in force is to be regarded as the owner of protected intellectual property right, its successors in title, or its duly authorized exclusive licensee as well as an individual, a corporation or an association authorized by any of the aforesaid persons to protect its rights.
Procedure for Registration by Right Holder
A right holder has to give notice in writing to the Commissioner of Customs at the port of import of goods infringing intellectual property rights requesting for suspension of clearance of goods suspected to be infringing intellectual property right.
The applicant has to annex proof of right, authorization from right holder (if application made by agent or any other person on behalf of right holder) and applicable fee. Customs may ask for further information or documents to process the application, which has to be provided by the right holder or his agent within 15 days.
The custom authorities, within 30 days from the date of notice, shall notify the applicant whether their application is registered or rejected. In case the application is registered, the intimation also contain the term for which the registration is valid, which is at least for a period of one year.
The registration is subject to condition that right holder shall execute a bond with the Commissioner of Customs for such amount with such surety and security as deemed appropriate by the Commissioner, undertaking to protect the importer, consignee and the owner of the goods and the competent authorities against all liabilities and to bear the costs towards destruction, demurrage and detention charges incurred till the time of destruction or disposal, as the case may be.
Earlier the right holders had to execute the consignment specific bond at the specific port within the period of three days from the day the customs authority of that particular port suspend the clearance of goods. However, recently the Customs authorities have introduced a system wherein the right holder can execute a centralized bond of a value which right holder feels would be sufficient for the allegedly infringing goods and security of 25% value of the bond, which shall be applicable for all ports. In case of interdiction of allegedly infringing goods, if the amount of Centralized Bond and the security are not sufficient to cover the value of the goods interdicted, then within three days of interdiction, the right holders would be required to execute a supplementary bond (as per Annexure – II to this circular) and furnish security for the corresponding amount.
Right holder also has to execute an indemnity bond indemnifying the Customs authorities against all liabilities and expenses on account of suspension of the release of allegedly infringing goods.
The right holder is under obligation to inform customs authority when his intellectual property ceases to be valid or if he ceases to be the owner of such intellectual property right.
Suspension of clearance of imported goods- Customs Authority based on the notice given by the right holder or on their own suspend the clearance of the goods in respect of which they have prima-facie evidence or reasonable grounds to believe that the imported goods are suspected to be goods infringing intellectual property rights.
The Customs department immediately inform the importer and the right holder or their respective authorized representatives through a letter issued by speed post or through electronic mode of the suspension of clearance of the goods and state the reasons for such suspension.
In case the right holder or his authorized representative does not join the proceedings within a period of ten working days from the date of suspension of clearance the goods may be released by the Customs department provided that all other conditions of import of such goods under the Customs Act, 1962, have been complied with.
The above time-limit of ten working days may be extended by another ten days in appropriate cases by the Commissioner or an officer authorized by him in this behalf.
Where the clearance of goods has been suspended by the customs on their own and right holder does not join the proceeding and fulfill his obligation to provide information or assistance, including technical expertise and facilities for the purpose of determining whether the suspect goods are counterfeit or pirated or otherwise infringe an intellectual property right, within five days from the date of suspension of clearance, the customs may release said goods provided that all other conditions of import of such goods under the Customs Act, 1962, have been complied with.
In the case of perishable goods suspected of infringing intellectual property rights, the period of suspension of release is three working days which may be extended by another four days subject to the satisfaction of the Commissioner or the officer authorized by him in this behalf that such extension shall not affect the goods.
Examination of goods by right holder- The right holder and the importer or their duly authorized representatives are authorized to examine the goods, the clearance of which has been suspended, and may obtain representative samples for examination, testing and analysis to assist in determining whether the goods are pirated, counterfeit or otherwise infringe an intellectual property right, without prejudice to the protection of confidential information.
Supply of information to the right holder- The right holder are authorized to request for the information about the name and address of the importer and additional relevant information relating to the consignment which has been suspended from clearance and same has to be provided by the customs, without prejudice to the protection of confidential information.
Supply of information to the importer- At the request of the importer or his duly authorized representative, Customs department shall inform the name and address otr other additional information of the right holder without prejudice to the protection of confidential information.
Disposal of infringing goods
Where the goods detained or seized have been found to be infringing intellectual property rights the goods are destroyed by the custom department under official supervision or disposed outside the normal channels of commerce after obtaining 'no objection' or concurrence of the right holder or his authorized representative:
The costs toward destruction, demurrage and detention charges incurred till the time of destruction or disposal, as the case may be, shall be borne by the right holder.
Re-exportation of the goods infringing intellectual property rights in an unaltered state is not permissible.
The Customs officials may on their own, or at the request of the right holder, retain samples of goods infringing intellectual property rights prior to their destruction or disposal and provide the same to the right holder or importer if such samples are needed as evidence in pending or future litigations.
Exclusion of baggage and De-minimis Imports- Goods of a non-commercial nature contained in personal baggage or sent in small consignments intended for personal use of the importer are not subject to the above Rules.
Protection of action taken under the Rules- Customs officers when acting in good faith and having followed the procedures set out in these Rules shall not be liable for:
- Any failure to detect goods infringing intellectual property rights.
- The inadvertent release of such goods.
- Any other action in respect of such goods.